RICS Submission to the HM Treasury Fundamental Business Rates Review Call for Evidence

30 September 2020

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Rating Director, Andrew West, sits on the RICS (Royal Institution of Chartered Surveyors) Rating and Local Taxation Policy Group whose remit is to provide impartial, balanced advice to the Government.

The Westminster Government has asked for views on various aspects of the business rates system in England which is currently subject to a fundamental review. This is one of many reviews conducted by the UK Government over many years which have led to very little change in the fundamentals of the system.

One of the very few positive outcomes of the Covid-19 pandemic is that it could initiate a real drive to reform the system for the better.

The principal recommendations to Government made by the RICS are as follows:

  • Government must commit to fixing the multiplier and to removing the requirement for revaluations to be revenue neutral.
  • Government should reduce its uniform business rate to 35p where it was originally set when introduced in 1990. A tax of around 1/3 of properties’ market rental value is a fair and reasonable contribution for businesses to make towards the cost of local government services. This compares with the current rate for larger properties in England of 0.512p.
  • Government must undertake a thorough review of relief and exemptions to ensure they are each fit for purpose and set at an appropriate level. Some reliefs currently in place may no longer be necessary following significant cut in the UBR.
  • Government must remove downwards phasing for 2021/22 and any future revaluations.
  • Government must commit to shorter revaluation periods from April 2023 and reduce the gap between the antecedent valuation date and the revaluation from two years to one year, thereby maintaining a close link with current economic conditions and property values.
  • In the short term:
    • Government must provide an early indication to businesses as to whether the expanded retail relief scheme is to be extended for 2021/22 to assist businesses to recover following the upheaval caused by the Covid-19 pandemic and its aftermath.
    • Government should examine extending the rates holiday to other sectors which have also been severely impacted by the Covid-19 pandemic and its aftermath, but have thus far been excluded from any form of business rate relief, for example, the aviation industry.

The Government has invited responses to the fundamental review in two parts and this is the first with the second following next month.

I have worked with Jeremy Symons over the past three years successfully leasing and buying property in support of my business. I continue to be very pleased with his knowledge of the market and expertise. Our relationship over this time has resulted in acquiring 20,000 sq ft at Capital Business Park in Cardiff, leasing 11,000 sq ft at Southpoint, and subsequently leasing an initial 42,000 sq ft at Parc Bedwas, followed by a succession of expansions of a further 11,000 and then 47,000 sq ft, enabling us to centralise all of our operations at Parc Bedwas in a single 100,000 sq ft facility. The acquisitions were completed at the perfect time for tenant purposes and the rent fixed throughout the term at very economical rates. A job well done.

Bob James, Aerfin